In recent years, one of the most contentious issues in Harrisburg has been increasing the state minimum wage. Labor unions and other supporters argued the cost of food, heat, clothing, gasoline and other necessities have increased steadily since the last state minimum wage increase occurred 10 years ago. Opponents claimed raising the minimum wage would hurt small businesses.
The PA Tourism & Industry Association opposed legislation making the state's minimum wage greater than the federal minimum wage since 1997.
Since the beginning of the current two-year legislative session in January 2005, eight bills have been introduced in the state House and Senate. Eighteen states, including Maryland, New Jersey and New York increased their minimum wage in recent years.
After legislators approved the controversial pay raise in July 2005, minimum wage supporters intensified their lobbying efforts and criticized lawmakers for approving a pay raise for themselves and not helping working families in Pennsylvania.
In September, Governor Rendell announced he had changed his position and now supported increasing the state's minimum wage. The Governor previously had argued that raising the minimum wage is a federal responsibility.
When it became apparent that there was enough political momentum to support the minimum wage legislation, the PA Tourism & Lodging Association began a successful lobbying campaign to make sure the legislation would not affect tip credit wages and current federal and state exemptions for seasonal workers to lessen the impact of a minimum wage hike on tourism businesses.
On July 9, 2006, Governor Rendell signed into law Senate Bill 1090 as Act No. 112 of 2006. This new law increases the State's hourly minimum wage pay to $6.25 for businesses with more than 10 full-time employees on January 2007. In June 2007, the hourly pay jumps to $7.15. Smaller businesses will have more time to reach the $7.15 hourly level. Act No. 112 requires they raise the hourly minimum to $5.65 on January 1; to $6.65 on July 1, 2007; and to $7.15 on July 1, 2008. According to the state Department of Labor & Industry, this provision applies to 79% of the state's 268,618 employers. The bill also allows all businesses to pay a sub minimum or training wage to employees under age 21 for their first 60 days on the job.
